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Although Friedman does claim that managers ought to strive to maximize profits for shareholders, he also maintains that doing so should not be divorced from the ethical foundations on which business activity takes place. Managers, he asserts, ought to maximize profits for owners while conforming to the “basic rules of the society, both those embodied in law and those embodied in ethical custom” ( 1970).

Unbridled profit seeking is simply unacceptable behavior if such behavior is outside the mainstream of ethical norms. Managers may neither opt out nor excuse themselves from laws and customs. Instead, they must abide by what used to be called the basic “rules of justice.” In adding this caveat, Friedman follows the lead of Adam Smith who argued forcefully against the notion that private vices are public virtues and against the belief that greed, avarice, and selfishness can contribute to public well-being (Calkins and Werhane 1998). In Smith ‘s view, people engaged in competitive commerce can be vittuous because their vittues-in particular, their habits of prudence, justice, and self-command-are crucial to a well-functioning society (ibid.). Virtuous people, Smith believed, will uphold “religiously the sacred rules of justice in spite both of the greatest interests which might tempt, and the greatest injuries which might provoke [them] to violate them” ( 1982, 241).

In short, they will exercise self-command, Smith’s preeminent individual virtue. For Smith, as for Friedman, self-interest is subsumed within an ethical framework (James and Rassekh 2000). Smith states clearly that “in the race for wealth, and honours, and preferments, he may run as hard as he can, and strain every nerve and every muscle, in order to outstrip all his competitors. But if he should jostle, or throw down any of them, the indulgence of the spectators is entirely at an end. It is a violation of fair play, which they cannot admit of’ (ibid, 83). This ethical framework, which includes the notion of justice as fair play, is a social and ethical, not a legal, construct. lt is the platform on which character and reputation are forged: “To be anxious, or to be laying a plot either to gain or to save a single shilling, would degrade the most vulgar tradesman in the opinion of all his neighbors” (ibid., 173).

For Smith, therefore, regulating oneself, exercising self-command is of paramount importance. Not surprisingly, he regards self-command as the preeminent individual moral virtue, one from which “all the other virtues seem to derive their principal lustre” (1982, 241).

The Ethical Lacunae in Friedman ‘s Concept of the Manager, Jonathan B. Wight University of Richmond ,& Martin Calkins (Robbins, 2008, page 223)